Friday, March 30, 2007

Generational shifts in social expectations

Think back two generations (your grandparents) and forward two generations (your grandchildren). The difference between the providers of health insurance, education, cultural activities, employment, open space, and retirement benefits for our grandparents as compared to our grandkids - that is the sectoral shift we're living through right now.

With all the growth in corporate social responsibility, social investing & finance, revenue-producing nonprofits, hybrid social enterprises, and mission related investing - are we about to see the end of the bifurcated (commercial and not-for-profit) sectors as the last several generations have known them?

We seem to be approaching a new configuration of the private sector - part of which emphasizes returns for the public good and part of which emphasizes returns for private investors, but all organizations in which use - and are expected to use - a dynamic blend of market tools and social purpose.

I think we are at the front edge of a wave that will wash in one of two ways. We may see a two-sided sectoral structure that mergers the commercial and for-benefit structures in the private sector into a single force and leaves the public sector as the other force. Or, we may see the three sectors stay themselves and the dynamics between the sectors rise to the forefront as the force of change - where the dynamics become more cooperative, integrated, and interdependent - so that we expect action from all three on all social challenges.

Such changes would help sharpen our understanding about what works when and where. Market forces, social justice goals with an intent to increase equity, an emphasis on long term community returns instead of quarterly profits, and a degree of independence - all raise interesting possibilities about how change can be brought to bear.

This has huge ramifications. First of all, markets don't solve all problems, they actually create many. Second, new structures and new regulations are needed to guide these shifts well and appropriately. Third, this shift presents whole new opportunities for thinking about what problems to solve rather than being constrained by the limited tools of one sector or another to solve them. And, finally, what do these changes imply and require for the public sector?

Will we have two sectors or three sectors that work together in new ways? What will we expect from a community organization, a local business, and our municipal governments? How are these expectations being shaped now for the generations to come?

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